Did Brian Cowen Know About Anglo’s €2.3 Billion Loan To Quinn?

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Yesterday the Sunday Independent ran an explanatory piece on the events leading up to last week’s arrest and subsequent charging of former Anglo chairman Sean Fitzpatrick.

The headline was: ‘Scapegoat for politicians and regulators knew trial was always on the cards’. The paper listed other influential groups or people at that time, entitled ‘The remaining pieces of the Anglo jigsaw’.

One was on Brian Cowen and the civil service:

Brian Cowen, the Taoiseach, knew from at least March 2008 of Quinn’s giant gamble on Anglo after Sean FitzPatrick rang him on his mobile. In April 2008 he attended a dinner where he was introduced to Anglo’s board and executives by his college friends Fintan Drury, then an Anglo director. On Monday, July 28, 14 days after the Maple transaction, Cowen played golf and had dinner with Fitzpatrick, spending all day with him. According to both, Quinn was never discussed. Cowen, who spent all summer studying in Stanford University in the United States, has never been publicly questioned in detail about what he knew or didn’t know about the Maple affair”.

This recalled last Tuesday’s Tonight With Vincent Browne on TV3 where supporters of the Quinn family, Patricia Gilheaney and Mairin Martin (below), from the Concerned Irish Citizens’ Group, appeared with Irish Times finance correspondent and author of Anglo Republic, Simon Carswell and Tom Lyons, Of The Sunday Independent, who is also co-author of the Fitzpatrick Tapes.

To summarise, Patricia Gilheaney (second left) said there was “political pressure” in relation to Sean Quinn accepting the €2.3billion loan from Anglo – that was used to prop up Anglo’s shares. Anglo is chasing the Quinns for €2.8 billion but the Quinns claim the €2.3 billion loan was illegal.

Vincent Browne: “In 2007 and 2008, in 2007, it was discovered that Sean Quinn, through a device known as contracts for difference had effectively acquired a shareholding in Anglo Irish Bank to the tune of I think initially 23 per cent and eventually 28 per cent. He then didn’t have the money to finance the purchase of those shares even though he’d contracted to purchase them. And had those shares gone on the market at the time it would have effectively collapsed the Anglo Irish Bank at that stage and therefore that shareprice fixing was undertaken which partly involved this €2.3billion loans given to Sean Quinn to pay for shares that really he had already contracted to buy. That’s essentially it. Do you go along with that, Tom?”

Tom Lyons: “Yeah, that’s essentially it, Vincent. I mean Sean Quinn took the most outrageous punt on a banking stock in the history of the world. He built up a 28 and a half per cent stake in secret. Then when things begin to go wrong, he raids the insurance company. That wasn’t his money. That money was there to pay out for people who broke their legs or who got in car accidents. Then, when that, when he gets found out on that, he turns to the bank and he’s very eager to take the loans from the bank in order to fund his position.”

Patricia Gilheany: “How do you know that Simon, or Tom?”

Lyons: “He took them over, and over, and over.”

Gilheany: “How do you know he was very eager to take them? In fact it was the other way around. He wasn’t eager at all.”

Lyons: “Well he’d taken from the insurance company, from ordinary people to meet the margin calls. When that was shown to be illegal, he’d no other option but to go to the bank and he took them.”

Gilheaney: No my, excuse me now, my understanding is that he went to the bank in September 2007, effectively told, or he met Sean Fitzpatrick and David Drumm. (Turns to Simon) A meeting incidentally that has been recorded in books which I think is inappropriate given that all these things are before the courts. But anyway, he effectively told them he didn’t have the money to meet the margin calls and he was prepared to get out at that stage. Now the interesting thing is he was then rang, he was told in fact. There was.

Browne: “There was no getting out.”

Lyons: “He couldn’t get out.”

Browne: “He had already contracted to buy these shares. There was no getting out. He had entered into a contract to buy the shares at a certain price. And then, when the share price collapsed, he would have had to pay a huge amount of money to get the shares even though they were worth a fraction of what he would have been paying for them. That was the difficulty.”

Gilheaney: “Well he was prepared to take that hit at that stage. And I would disagree totally with Tom on this, suggesting, he nearly infers that Sean Quinn went asking for the money, nothing could have been further than the truth.”

Browne: “Sure he couldn’t have supported the purchase of the shares, or what’s called the margin call,  without getting money from Anglo Irish Bank. He couldn’t have done so.

Mairin Martin: “Vincent, Tom said he did all these things in secret. Was there nobody watching the Stock Exchanges or not watching..are there no regulators?”

Browne: “There is no-one watching the Stock Exchange with regards to contracts for difference, that’s the point. People can build up a shareholding in a company through contracts for difference which essentially means that they make a deposit and then agree to buy the shares at a particular price at some future time and it’s not disclosed. That’s one of the difficulties.”

Gilheany: “Well I resent the word, the inference there that there was something untoward about. It’s absolutely…”

Simon Carswell: But it wasn’t disclosed to the market.

Gilheany: “Yeah but that’s the nature of CFDs.”

Carswell: “Yeah but by their nature he wasn’t coming out and disclosing to the market.”

Gilheany: “Which he was perfectly entitled not to do.”

Carswell: “The point that I’m making is though that when he got to the point that he owned 28 per cent of the bank, he controlled 28 per cent of the bank, it was such a great shareholding, a large shareholding that at that point he was jeopardising not only the bank but also his own financial position if the bank got into trouble. He didn’t even realise that. That’s the scary thing about the gamble that he took.”

Gilheaney: “Well, look it, I object to the word ‘gamble’. Who’s gambling with citizens’ money now? Sorry now, with all due respect, we’ve heard this side of the story for two years now, it’s time to hear the other side. It’s not Sean Quinn or the Quinn family who are gambling with citizens’ money. It’s the current board of Anglo who’s spending in the region of €2 million a week on ridiculous cases that we’ll not recoup one cent.”

Browne: That might be true but we’re not talking about Anglo in general now. We’re talking about Sean Quinn and the issue is he couldn’t have financed the contracts that he entered into without getting money from Anglo. That’s why they got the €2.3billion.”

Gilheany: “But he didn’t ask for that?”

Carswell: “Can I just put it in another way? If Sean Quinn then, as you put it, through 2008 as the share price was falling and he was deeply, in a heavily loss-making position in the margin calls why didn’t he say ‘no I don’t want you loans then, Anglo Irish Bank?'”

Gilheaney: “Because he was told to put on the green jersey.”

Martin: “Yes.”

Gilheaney:And that came from political pressure aswell and that will come out, Simon. And I think you know that.”

Carswell: “Well, perhaps you can explain that because there’s a reference in the Mail on Sunday at the weekend in an interview he gave where he had a conversation with Brian Cowen. I mean do you know anything about that?”

Gilheany: “I believe that Brian Cowen rang him in the days after, when Quinn Insurance went into administration.”

Carswell: “How do you know this? Has he told you this? Sean Quinn?

Gilheany: “No, he hasn’t told me. I’ve met Sean Quinn very few times but, as I’ve said, I’ve asked the hard questions.”

Carswell: “How do you know that specific fact though, there in relation to Brian Cowen?” How do you that?

Gilheaney: “Yeah because I heard that interview.”
Carswell: “With the interview that he gave to the Mail on Sunday. But I’m wondering how…?”

Gilheany: We were observers actually because we were preparing for this interview tonight. So we sat in, we just sat in as observers, Mairin and myself.

Carswell: “In the interview with Sean Quinn?”

Gilheaney: “Yeah there were a number of people in the room, yes. Yes just to prepare for tonight. So I don’t think you need…”

Carswell: “Sorry I just want to clarify. You were sitting in the room and Sean Quinn was interviewed by the Mail on Sunday?”

Gilheaney: “Yes, yes.”

Martin: “Yes, yes.”

And any doubts that Gilheaney and Martin were not speaking for Sean Quinn were dispelled last night in Ballyconnell, Co Cavan: